How to generate a deformed mesh based on applied texture
You can use a Displace Modifier to do this.

From the wiki:


  The Displace modifier displaces vertices in a mesh based on the intensity of a texture. Either procedural or image textures can be used. The displacement can be along a particular local axis, along the vertex normal, or the separate RGB components of the texture can be used to displace vertices in the local X, Y and Z directions simultaneously. 


For example: